Shares of Virgin Orbit (VORB:NASDAQ) sank 23% Tuesday after the space satellite company filed for Chapter 11 bankruptcy protection. Virgin Orbit also said it would lay off nearly all of its workforce. Just a week before, the company said it was slashing its headcount by 85%. It is the latest company that took the SPAC route to the public markets to file for bankruptcy.
“Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents,” CEO Dan Hart said.
“I am confident of what we have built and hopeful to achieve a transaction that positions our Company and our technology for future opportunities and missions,” he added.
Virgin Orbit is among a select few U.S. rocket companies to successfully achieve orbit with a privately developed launch vehicle. Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight.
The company’s has launched six missions since 2020, counting four successes and two failures. Its last mission suffered a mid-flight failure, with an issue during the launch preventing the rocket from reaching orbit. It crashed into the ocean. The high-profile launch which had rockets and satellites belonging to the to the U.K., the U.S., and other governments ended in the destruction of its satellite payload.
Virgin Orbit has been sourcing for new investors with majority owner Richard Branson unwilling to fund the company further. Branson founded the company in 2017 and owns a 75% interest. Abu Dhabi sovereign wealth fund Mubadala holds the second-largest stake at 18%.
For Mr. Branson, the failure marks a significant blow after his Virgin Group invested more than a billion dollars into a company that once appeared to have bright prospects in the rapidly growing market for commercial-satellite launches.
It is a markedly different picture at present for Virgin Orbit which was valued $4bn at the time. Tuesday’s closing price brought the space satellite’s company to $65m. The failed launch couldn’t have come at a more difficult time to raise capital. Higher interest rates have made the cost to borrow more expensive.
However, departing Chief Operating Officer Tony Gingiss had some choice words for the company’s leadership, as well as a lengthy and detailed apology to its employees.
“You deserved better than this!” Gingiss wrote in a companywide email on Monday, which was obtained by CNBC. “You have been part of something audacious, challenging, and fulfilling [but] … You simply did not have the leadership or opportunity to demonstrate to the world what you can fully do and how this product could be an enduring force in the market,” Gingiss said.
Gingiss’ email appears to call out Virgin Orbit CEO Dan Hart, although not by name, and offers an apology to employees that they “have not heard from the person who should be saying it.”
“I’m sorry that I was not able to convince our leader and board to take a different path to give us more time to figure things out,” Gingiss said in the email.
The company noted in a securities filing that Gingiss was laid off as one of the 675 positions eliminated.
Virgin Orbit began commercial services in 2021 and began publicly trading on the Nasdaq stock exchange after a so-called SPAC merger. The deal saw the company valued at nearly $4 billion at the time.
The company, whose satellites are fired from under the wing of a Boeing Co. 747 jumbo jet, pitched itself as a shake-up in the industry, able to launch at short notice and from any runway that can handle these planes.
The method ran counter to the likes of Elon Musk’s Space Exploration Technologies Corp., referred to informally as SpaceX, which uses vertical launchers to send satellites into space.